Transaction Processing Systems Manual or automatic all businesses

Transaction Processing Systems • Manual or automatic – all businesses systematically process transactions • Function: process routine, day-to-day business activities • Computerized TPS: – Batch – Online (real-time, OLTP) • The foundation of business systems MIS 175 Spring 2002 Chapter 9 MIS 221

Batch TPS • • • Originally, the only available option Transactions accumulated over period of time Time period – day, week, month Transaction records accumulated in files When batches are processed, what happens? – Update databases – Generate reports – Generate transactions for other systems MIS 175 Spring 2002 Chapter 9 MIS 221

Batch Processing Pros and Cons • Pros – Relatively easy to program, install and maintain – Batches can be processed during low-activity periods • Cons – Information is delayed MIS 175 Spring 2002 Chapter 9 MIS 221

Online TPS (OLTP) • Transactions are processed in real time • Required for any “modern” application where time is critical • Well supported by client/server computing model MIS 175 Spring 2002 Chapter 9 MIS 221

Hybrid TPS • OLTP applications can feed transactions to batch systems – Examine: GL only updated once per day • Real time order capture with delayed processing MIS 175 Spring 2002 Chapter 9 MIS 221

TPS Requirements • Capture, process and store transactions • Produce reports and information about transactions • Produce transactions for other TPS • Be accurate and timely • Be efficient – require less labor • Increase customer service • Increase competitive advantage MIS 175 Spring 2002 Chapter 9 MIS 221

TPS Activity Model • Data capture – From online entry or “external” system • Data validation – Should be done as close to source as possible • Processing – Data manipulation – Database updating – Generation of transactions for other systems • Archive Transaction • Create documents and reports MIS 175 Spring 2002 Chapter 9 MIS 221

Management Issues • Uptime – How long can the system be “down” before significant costs are incurred? • Processing Delays / Response Times – How quickly must a transaction be processed? – What is the worst online response time that is acceptable MIS 175 Spring 2002 Chapter 9 MIS 221

Management Issues (2) • Disaster Recovery – What plans are in place to recover lost business data? – What plans are in place to resume business processing in case of disaster? • Audit – Can you verify the integrity of the system? – How will you know if transactions are not processed or are processed incorrectly? MIS 175 Spring 2002 Chapter 9 MIS 221

TPS By Function • Order Processing • Procurement & Inventory Control • Accounting MIS 175 Spring 2002 Chapter 9 MIS 221

Order Processing TPS • Order capture – Variety of means • Configuration • Shipment planning and inventory allocation – Prioritize orders, select shipment locations, allocate inventory to orders • Shipping and warehousing – Picking, packing, invoicing, reporting MIS 175 Spring 2002 Chapter 9 MIS 221

Procurement • Inventory Control – Raw materials, WIP, FGI, etc • Purchase Order Processing – Generating, transmitting, maintaining purchase orders • Receiving • Accounts Payable – Boundary between procurement and accounting MIS 175 Spring 2002 Chapter 9 MIS 221

Accounting • • • Accounts Payable Accounts Receivable Budget Payroll General Ledger Asset Management MIS 175 Spring 2002 Chapter 9 MIS 221

Disadvantages of Functionally Organized TPS • Processing inefficiency • Data redundancy – Causes integrity problems – Inefficient • Temporal integrity problems – Caused by different times at which processing occurs • Lack of information coherence MIS 175 Spring 2002 Chapter 9 MIS 221

Enterprise Resource Planning Systems • Key word is Enterprise: solution designed for entire enterprise • All processes organized around one enterprise-wide data model MIS 175 Spring 2002 Chapter 9 MIS 221

Advantages of ERP • Elimination of costly legacy systems – Old systems are expensive to maintain and reduce business agility • Improvement of processes – ERP may have implemented best-in-class processes • Improve data access and data integrity – Provide complete, consistent view of enterprise data MIS 175 Spring 2002 Chapter 9 MIS 221

Disadvantages of ERP • Implementation cost – Software and hardware – Expertise – Opportunity costs • Time to implementation – Lengthy and difficult process • MOC (management of change) challenges • System integration difficulties • Vendor dependence MIS 175 Spring 2002 Chapter 9 MIS 221

Current ERP Vendors • • • SAP Baan People. Soft Oracle J. D. Edwards Manugistics MIS 175 Spring 2002 Chapter 9 MIS 221

R/3 Architecture • Functionally rich – More functional options than a business will ever need • Logical – Built around information model – 10, 000 tables • Control tables • Application data tables – Heavily parameterized MIS 175 Spring 2002 Chapter 9 MIS 221

R/3 Architecture (con’t) • Hardware – PC Clients – Application server – Database server • Public interfaces – BAPI • Customization – ABAP Development System MIS 175 Spring 2002 Chapter 9 MIS 221